Scotiabank has the right to nominate two individuals to the KeyCorp board of directors. Credit: TippaPatt/Shutterstock.

Canada-based financial services company Scotiabank has finalised its $2bn investment in KeyCorp, acquiring a total of 14.9% stake.

The transaction follows an agreement announced on 12 August 2024.

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The completion of this investment marks the end of Scotiabank’s two-phase plan to acquire a minority stake in KeyCorp.

Last month, Scotiabank obtained the approval from the Board of Governors of the US Federal Reserve System to execute the second phase of its investment, which involved purchasing a further 10% stake in KeyCorp.

The initial phase, which provided Scotiabank a 4.9% stake, was announced in August 2024.

Scotiabank expects this investment to have a positive impact on its earnings per share within the first year following the completion of the additional investment.

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As part of the agreement, Scotiabank has the right to nominate two individuals to the KeyCorp board of directors.

These nominations include a senior officer and an independent third-party director, subject to KeyCorp’s consent.

Scotiabank president and CEO Scott Thomson earlier said: “This strategic investment in KeyCorp, a premier bank in the U.S., significantly increases the capital deployed to our identified priority markets.

“We believe that this transaction provides attractive near-term returns to our shareholders and creates future optionality for Scotiabank in the North American corridor, given our unique position as the only Canadian bank with a presence across Canada, the U.S., and Mexico.”

KeyCorp, with a presence across 15 states, operates around 1,000 branches. It offers a comprehensive suite of services, including commercial and retail banking, as well as investment advisory.